Important features of Maharashtra Budget 2008-2009

Housing

• 10 lakh houses will be constructed in two years under housing programme.
• Additional FSI to MHADA Colonies.
• 25 per cent premium from developers of SRA scheme
• An outlay of Rs.116.16 crore under Indira Awas Yojana

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PART II

VAT Receipts Review - In the first year of introduction of VAT in 2005-06 growth rate was negative at -8.5%.

With the 2004-05 as a base year .CAGR of 10.5 per cent for 3 years.

At reduced base of 2005-06, CAGR of next two years is 21.43 per cent.

CST Rate Reduction  Rate to be reduced from 3 per cent to 2 per cent w.e.f. 1-4-2008.

Goods and Service Tax - The new taxation System will be introduced by April  2010.

Pending Assessments under BST Act.-Sales Tax Department to tackle old pendency of assessments.

Electronic returns - Electronic returns through Internet. Initially for large tax payers, gradually covering all the dealers.

Survey Amnesty Scheme under BST Act for unregistered resellers detected during survey. Details to be announced by Commissioner.

Reduction in relevant Set-off rules  On par with CST rates.

Tax rate on Food grains, Cereals Pulses, turmeric, chillies, tea etc. Existing tax exemptions and concessions to continue up to 31st March 2010.

ATF for Aircrafts. Tax rate reduced from 25 per cent to 4 per cent when supplied to Aircrafts outside Mumbai & Pune for promotion of aviation in developing regions of the State.

Tax rate on timber - Reduced to 4 per cent for one year.

Construction Works Contracts-Not to include cost of land.

Entry Tax for Air conditioners and tiles entry tax made applicable.

Passenger Tax A/c Coach Passenger Services of MSRTC to attract tax @ 5.5 per cent. For private carriers new rates per year, per seat, are

A/c Sleeper Coach-Rs.7000/-

A/c Buses-Rs.6500/-

Non A/c Buses with AIPP-Rs.5500/-

(*All India Passenger Permit)

Stamp Duty on Development Agreement, Power of Attorney

For Rural Areas – 3 per cent

For “C” class Municipalities – 4  per cent

For other parts of the State – 5 per cent

However,

Power of Attorney without consideration to a close relative for transfer of property to attract a stamp duty of Rs.500/-

Refund for Spoilt Stamps-With 10 per cent deduction.

Mortgage deeds for Crop loan - Stamp Duty fully exempted without any limit. Loss of revenue estimated at rupees 80 crore.

Period of Adjustment for Stamp Duty credit- Adjustment period reduced from three years to one year to curb speculation.

Tax on Vacant Land – A Bill to levy tax on vacant land to be introduced.

e-Payment Gateway System - Tax payments through e-Payment Gateway via Internet. Facility to be introduced this year .

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Right to Information Act

39.        The State Government has established State Information Commissioners' offices at Aurangabad, Nagpur, Pune, Nashik, Navi Mumbai and Amravati and Greater Mumbai.

39.1      Training programmes on the Right to Information Act have been conducted at YASHADA, Pune for all Public Information Officers and Appellate Officers. The Government has sanctioned a grant of Rs.1.13 crore to YASHADA for the training of 12,500 officers in 2007-08.

State Housing Policy

42.        State Government has published its housing Policy on 23^rd July, 2007.  The provisions pertaining to special township policy, redevelopment of old and dilapidated buildings, cluster approach for urban renewal, joint venture schemes for redevelopment projects, redevelopment of gaothans, providing mandatory layout for economically weaker sections/low income groups/middle income groups and setting up a Regulatory Commission have been incorporated in the housing policy.

Housing Programme

45.        The Government had decided to undertake an ambitious programme of construction of 10 lakh houses under various schemes to be completed in the next two years for low income group and middle income group families. Under this programme, 2.50 lakh houses under Indira Awas Yojana, 2.50 lakh houses under Rajiv Gandhi Gramin Niwara Prakalp, 2.50 lakh under Jawaharlal Nehru National Urban Renewal Mission, 1.50 lakh under Slum Rehabilitation Authority and 1 lakh under MHADA will constructed. This programme will benefit slum dwellers, below poverty line families, low income group and middle income group families. For implementation of this programme, resources from existing schemes of the Government of India and the State Government will be pooled. The State Government will also raise resources for the above mentioned housing programme through levy of a 25 per cent premium on developers undertaking Slum Rehabilitation Authority Schemes and grant of additional FSI for MHADA colonies.

Grant of the additional FSI for MHADA colonies

46.        MHADA colonies in Mumbai and across the State of Maharashtra have been the backbone of affordable housing for the low income and middle income families.  Most of these colonies were constructed several decades ago and have consumed less than one FSI. Grant of additional FSI for MHADA colonies will enable larger houses for existing residents and large scale additional new houses to be constructed in these colonies.

Concession to the Senior Citizens:

52.        At present, 50 per cant concession is available to the senior citizens above the age group of 65 years for journeys by ordinary buses of the Maharashtra State Road Transport Corporation. This concession will now be made applicable for journey by semi-luxury buses.   Further, this concession will be granted on the basis of identity cards issued by the State Government or the Central Government. I am sure that this will give relief to the senior citizens.

Increase additional FSI in Mumbai suburban.

120.     The FSI in Mumbai suburban district would be increased to 1.33 and would be brought on par with FSI permissible in island city.  For the additional 0.33 FSI, premium would be required to be paid on the basis of market value as per the ready reckoner.

Works Contract Tax : Cost of Land.

15.        It is a ruling of the Courts that if a building is under construction, the work of construction will be a works contract liable to tax.  The tax will be attracted so long as the individual agreements are entered into before the construction of the building is  completed.  It is necessary to ensure that the cost of land on which the building is constructed does not get taxed.  I propose to make suitable provisions in this regard.

Stamp Duty :  Change in the duty rates.

18.        Development agreements and power of attorney for development attract duty at the rate of 1 per cent  of the property involved under article 5(g-a)(1) and article 48(g) respectively.  I propose to charge duty on these documents as leviable on conveyance.

            Power of Attorney given for a consideration is charged as per conveyance under article 48(f).        I have now decided to include power of attorney without consideration authorising to sell immovable property  under this article.  The one exception would be for close relatives.  The power of attorney is given to close relatives without consideration and authorising to sell immovable property then the duty would be restricted to rupees five hundred.

Stamp Duty :  Adjustment

21.        If after purchasing a flat or a tenement from a developer it is resold within three years of the date of agreement then while paying the duty on the second agreement, credit is given of the duty paid on the first agreement.  In order to curb speculations in real estate, I propose to reduce this period to one year.

Stamp Duty :  Amnesty Scheme

22.        The citizens who purchase flats or apartments establish a housing cooperative society.  However many a ties the land on which the building stands is not conveyed.  This means that the purchasers do not get full property rights.  The relevant aw has recently been amended.  A competent authority would shortly be appointed to implement the new provisions.

If a building has been purchased some time back, then it would be unfair to collect stamp duty at today’s rates on the conveyance of the underlying land.  It is necessary to introduce an amnesty scheme in order to solve this problem.  The details of the scheme will be announced separately.

Tax on Vacant Land:

23.        The Urban Land Ceiling Act is now abolished.  It is possible that the land reserved in Development Plans for residential, commercial or industrial use may not be developed for extended periods.  This will make it difficult to provide affordable housing to low income groups and middle income groups.  It is, therefore, proposed to introduce a Bill for imposing tax on vacant lands.  The tax will be levied on persons who obtain permission for development of land but do not carry out development within a stipulated period.